FROM BALANCING ACT: AFRICAN SNOs – LAST YEAR’S MODEL STRUGGLES AT THE START GATE Africa’s Second National Operator licence processes run the danger of becoming the beached whale of regulatory liberalisation. The latter usually runs through the following stages: single monopoly operator, same plus mobile operators, and then reaches for a wider and more complex competitive ecology. The SNO is the cautious regulator’s option for introducing competition. In the early stages of liberalisation it allows the vertically-integrated monopoly of the incumbent to be converted into a duopoly operated by two vertically-integrated companies. So Senegal’s announcement in 2001 that it would introduce an SNO to compete with incumbent Sonatel perhaps fitted the pattern. But here we are six years later and there is still no SNO announcement from the Government and political timetabling (the recent President elections and the latter assembly elections) dictate that there will probably be no announcement until the Autumn. Sonatel has continued to entrench its de-facto monopoly and controls 80-90% of any market worth having. In any other country this degree of monopoly would be the subject of a legal anti-competition challenge. Malawi’s SNO bidding process (started in April 2006) appears to be going into a similar holding pattern. A local report leaking the conclusions of the evaluation process for the SNO bidders seems to show that MACRA will not proceed with appointing an SNO if it follows the evaluation report. There were three bidders: Access Communications, African Communications Ltd; and AirTel Communications. Terracom (the bidding vehicle of former Telecel owner Rwanda Miko Rwayitare) asked for a licence to do data and VoIP services. The three formal applications are all Malawian. However regulator MACRA’s Acting Director-General Mike Kuntiya says that a successful bidder will be known when the Government has made a final decision. Kuntiya maintains that all its evaluation report has done is make recommendations and the final decision must be made by Government. Speed is not a characteristic of the SNO process as it is unlikely that a decision will be made before April, several deadlines having already come and gone. Based on a number of different criteria including ownership and control, the technical and business plans, experience and credibility, the evaluation’s author ranked the three companies as follows: Airtel (86.83 points), Access Communications (73.57), Aircomms (69.5) and Terracom (14.52). The Government’s Information Minister said it was considering the company that scored the highest markets as it only had weaknesses in certain areas and MTL needed competition. The wheels have also come off Kenya’s SNO process when the selected winner Vtel Consortium failed to make the first licence payment. After Vtel failed to make its first payment, Reliance was give a week to raise its similar first payment otherwise the process would be cancelled. No news has emerged since that point. The curse of the SNO Licence procedure? We shall see.